American Bank expects growth in world oil prices

Azerbaijan, Baku, March 4 / Trend A.Badalova /
One of the world's largest U.S. bank JPMorgan has raised its forecasts for world oil prices this month. Based on the JPMorgan monthly report on energy market, one of the factors that influenced the change projections was expectations for a significant increase in world oil demand in 2010- 2011.

Oil Prices
JPMorgan predicts the average price of U.S. crude oil WTI to reach $83.5 per barrel in 2010 from $78.25 per barrel than predicted earlier. The bank predicts the highest price for this kind of oil this year to be in the fourth quarter - at $90 per barrel. In the first quarter, the bank predicts the average price at $77 per barrel, in the second quarter - $82 per barrel and in the third - $85 per barrel.

In 2011, the bank' analysts forecast an average price of WTI to hit $ 90 per barrel. In the first quarter, the analysts expect the price to reach $ 90 per barrel. In the second quarter, the analysts predict a price drop to $85 per barrel. Then again increase to $ 90 per barrel in the third and $ 95 per barrel in the fourth quarter.

The bank forecasts the average price for Brent North Sea oil brand at a similar level of WTI - $83.5 per barrel in 2010 and $90 per barrel in 2011. The highest price for this sort of oil in 2010 and 2011 will be observed in the fourth quarter ($90 and $95 respectively).

As a result of trades on Tuesday March 2, the April futures price of WTI on the New York Mercantile Exchange rose by $0.98 to $79.68 per barrel. Price of the April Brent futures rose by $1.29 to $78.18 per barrel on the London Stock Exchange.

World oil demand
Based on JPMorgan forecast, the world oil demand will increase by 1.7 million barrels per day to 86.3 million barrels per day in 2010. In 2011, the bank predicts an increase in world demand by 1.6 million up to 87.9 million barrels per day. The highest level of world oil demand in 2010 and 2011 will occur in the fourth quarter - 87.5 and 89 million barrels per day, respectively.

The report says that the increase in world oil demand in 2010, mainly related to the increase in oil demand in the countries outside the Organization for Economic Cooperation and Development (OECD), particularly in the Middle East and Asia.

Non-OECD countries' oil demand will increase by 1.5 million barrels per day to 40.6 million bpd in 2010 and 1.4 million to 42 million barrels per day in 2011, the bank forecated.

In 2010, OECD countries' oil demand will be 45.7 million barrels a day, which is higher by 0.2 million barrels per day compared the figure in 2009. In 2011, the bank predicts an increase in oil demand in those countries to 45.9 million barrels per day.Oil deliveries by OPEC and non-OPEC countries

JPMorgan forecasts an increase in oil supplies of OPEC by 0.6 million barrels per day to 29.2 million barrels per day in 2010. According to the bank's forecasts, the highest level of oil supplies by the cartel will occur in the fourth quarter of 2010- 29.5 million barrels per day.

In 2011, the bank predicts an increase in OPEC supply by 1.1 million barrels up to 30.3 million barrels per day. In the first and second quarters of 2011, the level of supply will be 29.9 million barrels per day in the third quarter - 30.5 million barrels in the fourth - 31 million barrels per day.

Oil supplies by non-OPEC countries will increase by 0.4 million barrels per day to 49.5 million bpd in 2010 and fell again to 0.4 million barrels to 49.1 million barrels per day 2011, the bank forecasted.